Highlights §
- Just two months after Google launched Gemini, its flashy new AI model, the company revealed that it had already built a better version. Gemini 1.5, Google said, was bigger, faster, and more capable than its predecessor. The February 15 announcement, outlined in a giddy 1,600-word blog post replete with sizzle reels, prompted buzzy coverage among AI researchers and the tech press. (View Highlight)
- Later that day, OpenAI introduced Sora, a tool that generates videos up to 60 seconds long based on text prompts. The rapturous response was immediate. CEO Sam Altman took prompt requests from X users and posted the results in real time. Words like “eye-popping” and “shockingly powerful” were thrown around, while researchers mused about the threat to Hollywood and the potential for deepfakery. (View Highlight)
- Then, days later, Google scrambled to explain why its image generation tool spit out racially inaccurate depictions of historical figures. The instinct to erect sky-high guardrails led Gemini to “overcompensate in some cases, and be over-conservative in others,” the company said. Industry insiders responded by questioning whether the company had a culture problem and calling for CEO Sundar Pichai’s head. (View Highlight)
- It was yet another gut punch. “It’s a PR nightmare for the company,” a current senior employee said. “Googlers are pissed.” Pichai has been describing Google as an AI-first company since 2016, but it has struggled to turn its foundational research — which powers technology like ChatGPT — into products that dazzle. (View Highlight)
- Chatter about Google’s transition from vanguard to dinosaur is hardly new. The company just turned 25 — roughly two centuries in tech years. It has lived through five presidents and two major market crashes. Its boy-wonder cofounders are now emeritus executives, and it changed its corporate name from a word that telegraphed futurism and brainpower to a word most people learn by age 3. But the past few years have introduced new troubles: lower tolerance for risk, crackdowns on innovation, layoffs, and a narrative that its famed products like search and Gmail are getting worse. They have supercharged the perception that Google, once seen as the most desirable place to work in Silicon Valley, has become the one thing it promised it would never be: boring. (View Highlight)
- The downstream consequences of Google’s graying loom large: a talent exodus, stale products, and an overreliance on its advertising cash cow. It also raises larger questions for Silicon Valley. What do you do when your formerly freewheeling juggernaut — the company that powered your reputation for boundless creativity and the idea that billions of dollars lurked behind any old line of code — loses its luster? (View Highlight)
- Brin and Page had little interest in defacing their clean, powerful search engine with clutter, until they tested what would turn out to be Google’s golden goose: search advertising. The upside was shedloads of cash and, in turn, freedom. The ad umbrella gave the founders cover to explore out-there ideas, and they encouraged employees to do the same. (View Highlight)
- “The whole culture of ‘treat employees really well, give them a sense of ownership’ — that was new and crazy in the early 2000s,” one veteran staffer said. It built giant internet balloons. It virtually mapped Earth with satellite imagery. It built its own high-speed internet. It even tried to extend people’s lives. In 2012, Business Insider listed 10 reasons Google was ”the greatest company in the world,” including that it “made sick perks standard for startups” and created “a little something we call ‘Google Glass.’” (View Highlight)
- As the company grew, the founders became wary of creeping bureaucracy. The formation of Alphabet in 2015, which put Google’s riskier bets outside the core business, was meant to be a solution. “In the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant,” Page wrote in a memo to employees at the time. It would prove more portentous than he could have imagined. (View Highlight)
- Ask Googlers when, how, and why their employer got too comfortable, and you’ll hear different theories. Some say the company got too big. Others believe it lacks visionary leadership. Some say a fear of regulation and public backlash led to paralysis; others think it became subservient to Wall Street. (View Highlight)
- One thing they can agree on, however, is the financial success of the Pichai era. Alphabet’s revenue has soared. The company’s market cap stands at around 1.7trillion,upfromjustover400 billion in 2015 when Pichai took the helm. Last year, Google announced that its cloud business — one of Pichai’s early big bets — had finally become profitable. (View Highlight)
- Yet 80% of Alphabet’s revenue still comes from advertising — the bulk of which comes from simple text ads that have sat atop Google’s search-results page since the turn of the millennium. (On February 28, Axel Springer, Business Insider’s parent company, joined 31 other media groups and filed a $2.3 billion suit against Google in Dutch court, alleging losses suffered due to the company’s advertising practices.) (View Highlight)
- As the company has struggled to diversify, fears of tipping the cash cow have only intensified. Risky prospects are viewed with skepticism, particularly when they don’t involve selling ads. The result is a growing sense that preservation has replaced innovation as Google’s chief form of currency. (View Highlight)
- Indeed, few of Google’s notably successful products were launched within the past decade. Plenty have been killed, however, including augmented-reality glasses and a short-lived foray into gaming. Even its core products have lagged. Users have long bemoaned — and researchers recently found — a decline in the quality of Google Search results. AI only threatens to make it worse. (View Highlight)
- “They just fell into the trap of this incrementalism,” said Michael Avrukin, a former Google engineer manager who joined in 2014 but left of his own volition last year. “It became so metric-driven, to ‘Are you moving this tiny needle by a little bit of an inch?’ If not, don’t do it.” (View Highlight)
- For years, Googlers were encouraged to explore side projects that weren’t directly related to their job — something known as “20% time.” Some of these experimental projects eventually shifted to an internal incubator named Area 120, a nod to a joke among employees that 20% time had actually become “120% time.” (View Highlight)
- In 2021, it cut short a policy that allowed employees to “bungee” into other Alphabet companies for several months. In 2022, it dramatically scaled back Area 120, shuttering several projects that were unrelated to AI and laying off most of its staff. A Google spokesperson noted that employees were still encouraged to pursue other projects, and pointed to work like AlphaFold and quantum computing and products like Magic Eraser as examples of innovation. (View Highlight)
- The flip side of Google’s “Hunger Games” is that smart people who challenge ideas and start debates are pushed to the side. It’s a far cry from the Google of 2012, when its Project Aristotle study found that the strongest trait in high-performing teams was “psychological safety.” (View Highlight)
- “If you lose trust and psychological safety, it’s virtually impossible to get the innovation,” said Patrick Mork, who led marketing for Google Play before leaving the company in 2013. “The minute it becomes too institutionalized and you slow down innovation, you lose the best people, because the best people hate bureaucracy.” (View Highlight)
- Googlers have long been allergic to bureaucracy. In 2018, more than a dozen vice presidents sent a letter to Pichai saying the company was moving too slowly and needed more decisive leadership, The New York Times reported. And employees have long circulated a document, titled “Why everything is so darn hard at Google,” criticizing the bottom-up structure. (View Highlight)
- That unhappiness has not gone away. In a 2023 companywide survey obtained by Business Insider, more than three-quarters of respondents said they were proud to work at Google. But 45% — tens of thousands of employees — said bureaucracy was slowing down their work. The company appears to be aware of this creep. “We’re simplifying our structures,” the Google spokesperson noted, while “reducing bureaucracy and layers.” (View Highlight)
- In 2018, a Google software engineer named Eric Lehman sent an email with the subject line “AI is a serious risk to our business.” In it, Lehman predicted a machine-learning system would outperform Google’s search engine. Such a system, he mused, could be developed outside Google by a rival giant, “or even a startup.” (View Highlight)
- Google has been working on artificial intelligence for well over a decade, quietly incorporating it into search, ad products, and YouTube video recommendations. It acquired DeepMind, the pioneering AI startup, in a cutthroat secret auction in 2014. In 2017, the company published a groundbreaking research paper that introduced a faster and more effective way for AI to parse information. It was so influential, in fact, that OpenAI used it as the foundation for ChatGPT. (View Highlight)
- Part of the answer may lie with its pesky aversion to risk. Caesar Sengupta, a former Google vice president, said that the company feared releasing generative-AI products that risked public backlash if they went wrong. “Everyone would have skewered it,” Sengupta, who launched and ran Google Pay, said. And skewer it they did this week with the Gemini debacle. (View Highlight)
- A similar scenario unfolded with its voice assistant, according to two people familiar with the project. The company was afraid of being the first to launch a product, dubbed Google Mic, that it had internally developed but came with many potential privacy headaches. In the end, Amazon’s Alexa debuted first, while Google was left to settle for second place. (View Highlight)
- “The fact that Google is not a decade ahead on generative AI is a joke, right? The fact that Google is not far and away the self-driving-car leader, it’s, like, a total joke,” the former Google director said, adding that the problem of Google’s lost supremacy is “maybe impossible to solve, frankly.” (View Highlight)
- There are some signs of hope. Google now is reminiscent of the Steve Ballmer-era Microsoft, which missed the smartphone, search, and cloud waves and was overtaken by Apple, Google, and Amazon. But under its current CEO, Satya Nadella, Microsoft performed an epic turnaround. Say it quietly, but for the first time in decades, Microsoft is sexy again. (View Highlight)
- But a better comparison may be IBM: still big, but no longer dominant, having shed the freewheeling culture that bred innovation and made its brightest thinkers feel like anything was possible. Becoming the new IBM isn’t all downside, but it’s clear Silicon Valley’s original tastemaker is no longer the belle of the ball. (View Highlight)
- Morphing from a magic factory to a power plant may simply be the logical end of the Great Google Culture Experiment. But this inflection point requires more-radical change than a few rounds of layoffs. Rivals like Meta and Microsoft have turned their fortunes around in recent years with more-decisive, top-down leadership, forging a cultural compromise between unconstrained innovation and corporate efficiency. (View Highlight)